Ask the readers – Are you happy with your finances now?

Posted on May 31, 2017

Take a look at yourself naked in the mirror. Are you happy with how you look right now? Many of us wouldn’t be happy regardless what our body looks like. We may think that we are 10 lbs too heavy, we may think that our belly looks too big, we may think that our arms look like toothpicks, or we might think that our body lacks any muscle tones.

Are you only happy with your body when you reach your ideal body image? Do you even have an ideal body image? Or is this “ideal body image” concept always changing, and therefore, not achievable at all?

Now take a look at your finances… Are you happy with where you are at financially right at this moment?

If you are, why are you happy with your finances now?

If not, let’s why are you not happy with your finances now?

Food for thought for those that are not happy with your financial situation right now… Are you going to be happy when you reach your financial goals? Or are you going to be happy when you reach a specific net worth, a specific FI number, or a specific investment portfolio value?

Hi I’m Bob from Vancouver Canada, I am working toward joyful life and financial independence through frugal living, dividend investing, passive income generation, life balance, and self-improvement. This blog is my way to chronicle my journey and share my stories and thoughts along the way.
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39 Comments

Just like body image, I think it’s impossible to be entirely satisfied with all aspects of your financial life. It’s easy to beat yourself up for not meeting a goal, for spending too much, or for picking the wrong stocks. I’m happy with where we are financially, although I know we have lots of improvements to make.

interesting question…i can say that i’m happy with my finances overall. But the most important thing is, i know i’m on the right track with dividend growth investing. And because of that a specific net worth or a milestone in my portfolio is not that important (although milestones can be used for motivation). – Fo me this journey to FI is fun in itself, day by day. I’m grateful that i found my passion.

That’s awesome you are happy with your finances overall. The important part of the FI journey is to enjoy the journey along the way. We shouldn’t be too focused on the end goal and forget that the journey is just as important.

I am happy where I’m at. But looking forward to where I’ll be in the future! It’s really going to start snowballing in the next 2-5 years. After that, it’ll be fairly smooth sailing. Relatively speaking that is.

I am happy with where we are but I fear for the future. Much like body image, I’m 25 and fresh now…think about me at 35 — would I be as fresh? What will happen in another housing recession? Aw I’m frightened already..

Yeah for sure I’m happy. Am I able to retire? Well I could if I moves somewhere where cost of living go’s down. But if we continue investing and spending like we currently are the future looks great! Always nice seeing you are on the right path.

We can be financially independent if we move somewhere in South Asia today but we choose not to. We are happy with our finances today. It’s definitely nice to get confirmation that you’re on the right path financially.

Not quite happy with where I’m at financially. Aside from the part of me that never quite feels satisfied with I’ve done, there are still areas I am working on. I suppose then I’m happy with where I’m heading, but not content with where I’m at.

A simple but important question to ask. In general, my response would be yes. I’m happy where my family currently is regarding finances but more importantly I’m really happy with the direction we are headed.

I’ll also say something short and sweet – never happy, never satisfied – the endless pursuit of my journey to FI : ) I’m kicking my auto loan out the door in the next 3 months and will start to pounce on investments that produce even more cash flow. Always hungry to improve!

I believe it’s important to be happy right now. If you’re not happy right now, you probably won’t be regardless of what you end up accomplishing later. Because there will be always that “next thing” you need to accomplish. Being happy now and still having the hunger and desire to achieve something bigger is very different though. 🙂

Why do you have to cut me so deep?! I know my body isn’t ready for summer yet! Wait.. oh yeah- finances! I think they’re in good shape currently but man did they look nasty a year or so ago. Got to love the new fresh feeling of debt-free!

John R

Simple stuff. Now aged 70 me & the wife are ‘Happy’ in all aspects of life. What we have we worked for, invested some along the way, mostly income properties, fix & flip.

On the RRSP, well when we reached 65 the RRSP were zero, we don’t have RRIF’s or any company pensions, just OAS, CPP and income generated in the TFSA as well as a once a year splurge in a non-registered investment account.

In in the spring of 2012 shortly after we turned age 65 we had just $52k jointly in our TFSA. We purchased two only split share corp’s which till today have yielded 16% ($8400/yr) consistently on the initial investment (never missed a beat). Today the market value of the two split shares are $70,250.

Since 2012 we have never DRIP’d those shares, nor added to their position or added any other stocks, bonds, ETF/ETN/CEF or mutual funds to the TFSA account, just those two positions + cash. In December each year we take out the dividends paid by those split shares in one lump sum. We have contributed to the TFSA each year till this year – those contributions are sitting in cash in a money market account. Sounds stupid, but you know what ‘at 70 we don’t need to build a nest egg’

Outside the registered TFSA we will make an investment once a year in something. It is generally a stock that has close to 5% dividend + must be optionable. Taking a $50 stock, in March prior to it’s ex-divided, buying this then immediately sell a covered call long deep in the money. This protects the downside as well as up’d the dividend. By the end of the year the option contract gets called & we’ve exited the position with a close to 6% – 7% net return.

The gain on the option premium is offset by the capital loss on the option contract sell price… it’s a wash

Life is simple, we are mortgage free living in the GTA of Southern Ontario, drive a 15 year old SUV. Our 2016 income from all sources included OAS, CPP, TFSA and the flirt on the non-registered investment, our joint gross income was $65,200.

Our monthly all-in expenses across 2016 was just over $2000/mth. We continue building wealth and to that we give cash gifts to our adult children on their Birthdays and Christmas. Better now than making them wait till we pop our clogs.

Sounds like you’re at an amazing place financially. Did you withdraw your RRSP early so there was nothing left by the time you turned 65? If so, wondering what your strategy was. Interesting that you’re doing covered call to increase your dividend stock return. This is something I should take a closer look in the future to boost our passive income. 🙂

John R

We are after the fact retired seniors, so much of this is likely not so important to you or your readers.

The drawdown began early prior to age 65. Most of the RRSP’s were spousal. I retired from active workforce at age 63. My wife & I were born the same year.

At some point there is no need to keep contributing to RRSP’s, depends on when you stop work, use the RRSP meltdown as part of income prior to drawing any guaranteed pension income + any savings, investments or passive income.

At 65 we also stopped paying into term life insurance for both of us.

Simple really – ‘how much income do folks need to retire at whatever age’ & do they need to keep on building wealth in retirement?

On a case by case, I suppose these days it depends on if you are mortgage free, empty nesters, do you want to travel or just go day to day smelling the roses, enjoying life one day at a time?

We are young 70 year olds, we’ve travelled the world, lived & worked in several countries for extended periods, have been PR’s in four different countries, so do we still need to travel… I don’t think so at this point. We like living in Canada – it’s clean, safe & offers us what we need in life.

Is there a reason why you decided to collapse your RRSP rather than converting it to RRIF?

John R

June 2, 2017 at 4:31 pm

I’d worked the numbers that said RRIF’s weren’t going to be what would work for us.

RIFF income is still taxable even with the mandatory minimum percentage withdrawal rates other than the $2000 pension deduction. The RRSP’s that we melted down to complete zero, we were able to do this over several years in minimal withdrawals $5000 at at time. The RRSP pot was managed starting in our 50’s to make sure the meltdown would have minimal tax impact.

My wife hadn’t worked outside the home for the longest time, I was the only working wage earner, we had income properties & dividend investments prior to the full aged 65 retirement.

So its a work the numbers to figure out if melting down RRSP’s for income can be tax advantage for you the individual.

Wanted to add (and I’ve posted this on other blogs) I had already retired once in my early 40’s with then two school aged children. Used what we had in income from a side business operated by my wife, withdrew the RRSP’s we had on as as needed basis (we had two children & were mortgage free), went back to university completed a graduate degree. Did this for 3 years then went back into the workforce till age 63.

Again, with zero liabilities – how much do you need in retirement?

Can you manage on investment income, do you need RRSP’s or RIFF’s, even government or private/company pensions… how much is enough with or without dependants?

In the next 24 months we shall be selling our home residence property to move to a lower cost area where property taxes & hopefully utilities are at least 25% less combined than what we are paying now, which means our monthly expenses will go down, even though we have enough income to without having to lower our expenses further.

Bob, are you & your wife (either of you) planning on working for a paycheque right up till mid 50’s to OAS retirement age? Will you draw your CPP early, will you stop at some point contributing to RRSP’s? Will you continue to max on TFSA and keep on building non-registered investment accounts to produce the $50k joint dividend income to minimize tax?

Will you be mortgage free, will you invest in other passive income streams other than the stock market?

Wow lots of good inputs, sounds like you have spent a lot of time planning out your retirement. I’m leaning toward withdrawing small amount of money from our RRSPs each year once we are relying on our portfolio once we are FI and not working. I don’t like the idea of having the government telling me how much money I need to withdraw from our RRIF. So we might collapse our RRSP before the 71 deadline.

We are hoping we won’t be working full time in our 50’s (hoping to retire earlier than that). We might be doing some part time work here and there but it’s not fully decided yet. The plan is to travel around the world and living in other countries if we can. In terms of OAS and CPP we see them as extra money. If we can get some money, great, but we are not including them in our retirement planning.

I’m okay with our finance. Not quite happy because we’re not generating enough passive income. Our net worth is great, but we’re not quite there with the passive income yet. Also, it’d be nice to splurge more often. At this point, I’m still very tight with money. Maybe when we’re a bit older, I’ll be a little more carefree. Life is good so we can’t complain too much.

I know how that feels with being tight with money. But over the last few years I have learned it’s OK to splurge here and there to get some luxuries. So I’m more OK nowadays to go out to have coffee and chocolate with Mrs. T here and there. It’s finding the right balance for you.

People are imperfect, life is imperfect. Finances are part of life, therefore also imperfect. There will always be something that we want to “improve” and “work on”. The definition of “happy” is also unique to each of us. Do I save 70% of my net income? Nope. Do I receive $ 1 000 a month of dividend income? Nope. Am I debt-free? Nope, -almost-. Am I happy with my finances? Yes! Because I am on the right track. Another person with a different conception of “financial happiness” will probably not see it that way.

Now that we see FI as an enabler for a happy life, I feel much better about our finances. Knowing our numbers allowed for a lifestyle change in my work and my wife is considering the same. So what that we reach our magical number later?!

I’m in pretty decent shape both financially and weight wise. Sure there is room for improvement on both ends. I figure I need to get a little bit more disciplined in each area but then again life is suppose to be enjoyed as well. So there are some sacrifices I’m not willing to make for a 6 pack or a 6 figure bump 🙂

Totally agree that life is supposed to be enjoyed as well. What’s the point if you go extreme saving and miss all these life events and once-in-a-life-time opportunities? I’d rather take the balance approach.

My mission is to show that financial independence is indeed possible for a family with kids while living in an expensive city like Vancouver.

My focuses include dividend & ETF investing, financial independence, early retirement, happiness, fruguality, and finding the right personal balance between saving for the future and enjoying life today.